Regulations Amending Certain Regulations Made Under the Special Economic Measures Act: SOR/2019-61

Canada Gazette, Part II, Volume 153, Number 6

Registration

SOR/2019-61 March 4, 2019

SPECIAL ECONOMIC MEASURES ACT

P.C. 2019-132 February 28, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Foreign Affairs, pursuant to subsections 4(1) to (3) of the Special Economic Measures Act ^{footnote a}, makes the annexed Regulations Amending Certain Regulations Made Under the Special Economic Measures Act.

Regulations Amending Certain Regulations Made Under the Special Economic Measures Act

Special Economic Measures (Burma) Regulations

1 Section 13 of the Special Economic Measures (Burma) Regulations ^{footnote 1} is replaced by the following:

Assisting in a prohibited activity

13 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 and 4.

2 Subsection 15(2) of the Regulations is replaced by the following:

Immunity

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Special Economic Measures (Zimbabwe) Regulations

3 The definition arms and related materials in section 1 of the English version of the Special Economic Measures (Zimbabwe) Regulations ^{footnote 2} is replaced by the following:

arms and related material means any type of weapons, ammunition, military vehicle or military or paramilitary equipment and their spare parts. (armes et matériel connexe)

4 Section 8 of the Regulations is replaced by the following:

Assisting in a prohibited activity

8 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 to 7.

5 Subsection 10(2) of the Regulations is replaced by the following:

Immunity

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

6 Paragraphs 13(1)(c) and (d) of the French version of the Regulations are replaced by the following:

• c) des armes à feu ainsi que des munitions et accessoires connexes pour lesquels une licence d’exportation a été délivrée à titre temporaire en vertu de la Loi sur les licences d’exportation et d’importation avant l’entrée en vigueur du présent alinéa;
• d) des membres des Forces canadiennes qui se trouvent ou se rendent au Zimbabwe dans l’exercice de fonctions officielles, notamment pour assurer la sécurité du personnel de l’ambassade du Canada, pour fournir de l’aide humanitaire ou pour toute autre activité autorisée par le chef d’état-major de la défense.

Special Economic Measures (Iran) Regulations

7 Section 8 of the Special Economic Measures (Iran) Regulations ^{footnote 3} is replaced by the following:

8 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 and 4.

8 The heading before section 9 and sections 9 to 13 of the Regulations are replaced by the following:

Obligations

9 The following entities must determine on a continuing basis whether they are in possession or control of property that is owned, held or controlled by or on behalf of a listed person:

• (a) authorized foreign banks, as defined in section 2 of the Bank Act, in respect of their business in Canada, and banks regulated by that Act;
• (b) cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial Act and associations regulated by the Cooperative Credit Associations Act;
• (c) foreign companies, as defined in subsection 2(1) of the Insurance Companies Act, in respect of their insurance business in Canada;
• (d) companies, provincial companies and societies, as those terms are defined in subsection 2(1) of the Insurance Companies Act;
• (e) fraternal benefit societies regulated by a provincial Act in respect of their insurance activities and insurance companies and other entities regulated by a provincial Act that are engaged in the business of insuring risks;
• (f) companies regulated by the Trust and Loan Companies Act;
• (g) trust companies regulated by a provincial Act;
• (h) loan companies regulated by a provincial Act;
• (i) entities that engage in any business described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the business involves the opening of an account for a client; and
• (j) entities authorized under provincial legislation to engage in the business of dealing in securities or to provide portfolio management or investment counselling services.

10 (1) Every person in Canada, every Canadian outside Canada and every entity set out in section 9 must disclose without delay to the Commissioner of the Royal Canadian Mounted Police or to the Director of the Canadian Security Intelligence Service

• (a) the existence of property in their possession or control that they have reason to believe is owned, held or controlled by or on behalf of a listed person; and
• (b) any information about a transaction or proposed transaction in respect of property referred to in paragraph (a).

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Applications

11 (1) A listed person may apply to the Minister in writing to have their name removed from Schedule 1.

(2) On receipt of an application, the Minister must decide whether there are reasonable grounds to recommend to the Governor in Council that the applicant’s name be removed from Schedule 1.

12 If there has been a material change in circumstances since the last application was submitted under section 11, a person may submit another application.

13 (1) A person whose name is the same as or similar to the name of a listed person and who claims not to be that person may apply to the Minister in writing for a certificate stating that they are not that listed person.

(2) Within 30 days after receiving the application, the Minister must,

• (a) if it is established that the applicant is not the listed person, issue the certificate; or
• (b) if it is not so established, provide notice to the applicant of his or her determination.

Regulations Implementing the United Nations Resolutions and Imposing Special Economic Measures on Libya

9 Subsection 19(2) of the French version of the Regulations Implementing the United Nations Resolutions and Imposing Special Economic Measures on Libya ^{footnote 4} is replaced by the following:

Motifs raisonnables

(2) À la réception de la demande, le ministre décide s’il existe des motifs raisonnables de recommander la radiation au gouverneur en conseil.

Special Economic Measures (Syria) Regulations

10 Section 4 of the Special Economic Measures (Syria) Regulations ^{footnote 5} is replaced by the following:

4 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3, 3.1 and 3.4.

11 Subsection 6(2) of the Regulations is replaced by the following:

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Special Economic Measures (Democratic People’s Republic of Korea) Regulations

12 Section 3 of the French version of the Special Economic Measures (Democratic People’s Republic of Korea) Regulations^{footnote 6} is replaced by the following:

3 Sous réserve de l’article 10, il est interdit à toute personne au Canada et à tout Canadien à l’étranger d’importer, d’acheter, d’acquérir ou d’envoyer des marchandises qui proviennent de la RPDC, que celles-ci en soient originaires ou non, et qui ont été exportées de la RPDC après la date d’entrée en vigueur du présent règlement.

13 Section 9 of the Regulations is replaced by the following:

9 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 2 to 8.

14 Subsections 10(2) and (3) of the Regulations are replaced by the following:

(2) Section 2 does not apply in respect of goods whose export is prohibited under the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

(3) Section 3 does not apply in respect of goods whose import is prohibited under the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

15 Paragraph 11(f) of the Regulations is replaced by the following:

• (f) services set out in section 4 of the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

16 Subsection 12(2) of the Regulations is replaced by the following:

(2) Section 6 does not apply in respect of technical data whose provision or transfer is prohibited under the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK).

Special Economic Measures (Russia) Regulations

17 Section 5 of the Special Economic Measures (Russia) Regulations ^{footnote 7} is replaced by the following:

Assisting in a prohibited activity

5 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 to 3.3.

18 Subsection 7(2) of the Regulations is replaced by the following:

Immunity

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Special Economic Measures (Ukraine) Regulations

19 Section 5 of the Special Economic Measures (Ukraine) Regulations ^{footnote 8} is replaced by the following:

Assisting in a prohibited activity

5 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by sections 3 and 4.1.

20 Subsection 7(2) of the Regulations is replaced by the following:

Immunity

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Special Economic Measures (South Sudan) Regulations

21 Section 5 of the Special Economic Measures (South Sudan) Regulations ^{footnote 9} is replaced by the following:

Assisting in a prohibited activity

5 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by section 3.

22 Subsection 7(2) of the Regulations is replaced by the following:

Immunity

(2) No proceedings under the Special Economic Measures Act and no civil proceedings lie against a person for a disclosure made in good faith under subsection (1).

Special Economic Measures (Venezuela) Regulations

23 Sections 5 and 6 of the Special Economic Measures (Venezuela) Regulations ^{footnote 10} are replaced by the following:

Assisting in a prohibited activity

5 It is prohibited for any person in Canada or any Canadian outside Canada to knowingly do anything that causes, facilitates or assists in, or is intended to cause, facilitate or assist in, any activity prohibited by section 3.

Duty to determine

6 The following entities must determine on a continuing basis whether they are in possession or control of property that is owned, held or controlled by or on behalf of a listed person:

• (a) authorized foreign banks, as defined in section 2 of the Bank Act, in respect of their business in Canada, and banks regulated by that Act;
• (b) cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial Act and associations regulated by the Cooperative Credit Associations Act;
• (c) foreign companies, as defined in subsection 2(1) of the Insurance Companies Act, in respect of their insurance business in Canada;
• (d) companies, provincial companies and societies, as those terms are defined in subsection 2(1) of the Insurance Companies Act;
• (e) fraternal benefit societies regulated by a provincial Act in respect of their insurance activities and insurance companies and other entities regulated by a provincial Act that are engaged in the business of insuring risks;
• (f) companies regulated by the Trust and Loan Companies Act;
• (g) trust companies regulated by a provincial Act;
• (h) loan companies regulated by a provincial Act;
• (i) entities that engage in any business described in paragraph 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act if the business involves the opening of an account for a client; and
• (j) entities authorized under provincial legislation to engage in the business of dealing in securities or to provide portfolio management or investment counselling services.

24 The portion of subsection 7(1) of the Regulations before paragraph (a) is replaced by the following:

Duty to disclose — RCMP or CSIS

7 (1) Every person in Canada, every Canadian outside Canada and every entity set out in section 6 must disclose without delay to the Commissioner of the Royal Canadian Mounted Police or to the Director of the Canadian Security Intelligence Service

25 Subsection 8(2) of the French version of the Regulations is replaced by the following:

Motifs raisonnables

(2) À la réception de la demande, le ministre décide s’il existe des motifs raisonnables de recommander la radiation au gouverneur en conseil.

Application Before Publication

26 For the purpose of paragraph 11(2)(a) of the Statutory Instruments Act, these Regulations apply according to their terms before they are published in the Canada Gazette.

Coming into Force

27 These Regulations come into force on the day on which they are registered.

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Issues

Economic sanctions include commercial and financial penalties applied by one or more countries against a targeted foreign state, designated persons from that state, or non-state actors such as terrorist organizations. An economic sanction regulation may impose travel, export and import restrictions with a particular foreign state; an arms embargo; an asset freeze on property in Canada held by the state or its nationals; and otherwise restrict economic activity with a particular foreign market, or with particular persons in that market. Sanctions measures may target specific aspects of the economy of a foreign state, or apply more broadly, depending on the circumstances the sanctions seek to address.

Since 1992, Global Affairs Canada has enacted more than 30 economic sanctions regulations, including under the Special Economic Measures Act (SEMA), in varying and urgent circumstances. SEMA sanctions currently apply to 10 countries in cases where an international organization of states has called on its members to adopt economic measures against a state, or where the Governor in Council determined that a grave breach of international peace and security occurred that has resulted or is likely to result in a serious international crisis.

There are a number of non-substantive drafting errors, omissions and inconsistencies across the SEMA regulations, including several identified by the Standing Joint Committee for the Scrutiny of Regulations (SJCSR). In particular, the SJCSR identified certain provisions that ought to more closely mirror the language of the enabling legislation, and where possible, resemble provisions in the regulations that apply sanctions to other countries. The SJCSR identified other non-substantive issues in the SEMA regulations, which will be addressed by the Governor in Council in future amendments.

Objectives

The amendments have the following objectives:

• to harmonize terms used in the SEMA regulations with those used in the enabling statute or across other SEMA regulations;
• to repeal obsolete or spent regulatory provisions which have no current application;
• to add clarity to regulatory provisions as suggested by the SJCSR;
• to correct typographical or grammatical errors; and
• to update references to related regulations made under another enabling legislation.

Description

The Regulations Amending Certain Regulations Made Under the Special Economic Measures Act (the Regulations) amend economic sanctions regulations made under the SEMA in the following ways:

Harmonize regulatory provisions

• Harmonize and update the wording in the “Duty to Determine” provisions, which require financial institutions to determine whether they are in possession or control of property of a listed person, across SEMA regulations to reduce inconsistencies between them. The most recent Regulations, the Regulations Implementing the United Nations Resolutions on Mali (SOR/2018-203) [the UN Mali Regulations], served as the model.
• Harmonize the wording in the “Duty to Disclose” provisions, which require persons in Canada and Canadians outside of Canada to disclose to the Royal Canadian Mounted Police or the Canadian Security Intelligence Service if they are in possession or control of property of a designated or listed person, across the SEMA regulations. The UN Mali Regulations served as the model.
• Harmonize the wording in the de-listing application provisions and the mistaken certificate provisions in the Special Economic Measures (Iran) Regulations (SOR/2010-165) [the SEMA Iran Regulations] with other SEMA regulations.
• Replace remaining instances of “permettre l’utilisation” with “rendre disponible” (“make available” in English) throughout the SEMA regulations.
• Replace “causes, assists or promotes” (“occasionne, aide ou favorise” in French) in various sanctions regulations with “causes, assists or facilitates” (“occasionne, aide ou facilite” in French) in all SEMA regulations.

Correct typographical or grammatical errors

• Address a number of typographical and grammatical mistakes in the French version of the Special Economic Measures (Zimbabwe) Regulations (SOR/2008-248), including improving the grammar in the definitions section and in section 3, replacing “lesquelles” with “lesquels” in paragraph 13(1)(c), and removing the capitalized “C” in “chef” in paragraph 13(1)(d).

Update references

• Update references in subsections 10(2) and (3), paragraph 11(f), and subsection 12(2) of the Special Economic Measures (Democratic People’s Republic of Korea) Regulations (SOR/2011-167) to the Regulations Implementing the United Nations Resolutions on the Democratic People’s Republic of Korea (DPRK) [SOR/2006-287].

“One-for-One” Rule

The “One-for-One” Rule does not apply to the Regulations, as they impose no additional administrative burden.

Small business lens

The small business lens does not apply to the Regulations, as there are no costs to small businesses.

Rationale

The Regulations respond to the recommendations made by the SJCSR by achieving greater consistency across economic sanctions regulations, by correcting mistakes, and by repealing obsolete provisions. Unwarranted inconsistencies between similar regulations create uncertainty with regards to the interpretation and application of one sanctions regulation relative to another.

The amendments are non-substantive and technical, serve to improve the regulatory base, and do not impose any costs on the government or stakeholders. Consistent language across individual sanctions regulations improves the integrity of the sanctions regime as a whole. The amendments establish a model for certain types of economic sanctions provisions with which future sanctions may be aligned. The common language changes will also facilitate future substantive updates to country-specific sanctions according to Canada’s policy needs.

Contact

Roland Legault
Director
United Nations, Human Rights and Economic Law Division
Global Affairs Canada
Telephone: 343‑203‑2450